Exclusive: KPMG refuses to release controversial green energy report

by Jessica Shankleman

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07 Feb 2012

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KPMG is refusing to publish the full findings of a controversial study examining the cost of the government's green energy policies, which was originally used as a basis for a series of media reports attacking the cost of renewable energy.

The preliminary findings of the report, dubbed Thinking about the Affordable, were made public last November. They claimed Britain could meet its 2020 carbon reduction targets more cost effectively by building nuclear and gas-fired power stations instead of wind farms, according to sister publication BusinessGreen.com

The report was seized on by critics of the government's green agenda and also formed the basis of a number of media reports, including a BBC Panorama special that attacked the cost of renewable energy subsidies.

The preliminary findings of the report suggested the UK could save £34bn by ditching plans for a massive expansion in wind power capacity and instead focusing on nuclear and gas capacity.

It was the first of a series of studies that have been published during the last few months, claiming wind power is too unreliable and costly to provide an effective means of keeping the lights on while reducing carbon emissions.

Trade body RenewableUK slammed the KPMG study as inaccurate on the grounds it had failed to consider the full lifetime and operating costs of new conventional power plants. Green campaigners have also repeatedly called upon KPMG to publish the full version of the report and disclose its methodology.

But, a spokeswoman for KPMG, told BusinessGreen that the company had decided not to release the full report as researchers had deemed it was "ripe for misinterpretation".

"The assumptions and parameters used in the model – which examined the investment and lifetime costs of different energy generation sources – produced large swings in the financial outcomes," she explained.

"To avoid any misinterpretation we have decided not to publish any findings, although we are discussing our analysis with interested clients and stakeholders in the energy industry."

KPMG acknowledged a leaked press release, obtained by the Sunday Times, BBC's Panorama and BusinessGreen, had opened the study up to accusations of bias, which had also been a factor in the team's decision not to publish.

"Unfortunately things do get boiled down into a headline and the findings are too complex for that," she said.

The spokeswoman admitted there had been mishandling of the release to the report, maintaining that the draft press release had been leaked, although she refused to provide further details on how it had been made public.

However, she stood by KMPG's methodology, adding the research team had since come to an agreement with RenewableUK over how the figures were derived.

She also maintained KPMG had close ties with the green energy industry, was not "anti-wind" and had last week been involved in a major wind farm deal.

However, a spokesman from RenewableUK said while it had met with KPMG since the findings were published, it stood by its original concerns over the report's methodology.

"We welcome the decision by KPMG not to release this report. The methodology they used did not properly compare with how power generation systems function in the real world," he said.

"KMPG needs to be made more aware of the benefits of wind energy. The cost is just £10 per household per year, according to the independent regulator Ofgem.

"Gas hit a three-year high of 75p per therm in Britain on Friday [3 February] as a result of the cold snap across Europe. We have to get off the fossil fuel hook to stop our energy bills escalating."

KPMG's reluctance to release the report will be seized on by green and renewable energy campaigners who have in recent months been forced to defend renewable energy policies from a series of reports about the cost of green energy, which they regard as misleading and inaccurate.

Renewable energy industry insiders expressed disappointment that KPMG was unwilling to release the controversial research, despite the fact that the preliminary findings had already been used to shape the current debate on energy policies.

Critics are also likely to ask questions over the BBC's willingness to use an incomplete report as the basis for one of its flagship current affairs programmes. 

"The fact that this report isn't being published also shows the BBC was wrong to use it in their Panorama programme in November, which painted an inaccurate picture of the impact of wind energy on current household bills," said the spokesman for RenewableUK.

"We will be seeking further clarification from the BBC's Panorama programme about exactly why they felt this report was worth using as a major part of their arguments against clean energy."

The news will also provide a boost to incoming energy and climate change secretary Ed Davey, who has already been forced to defend the government's wind energy policies from a group of around 100 Conservative MPs who last week wrote to David Cameron complaining support for wind farms is proving too costly. 

The news comes just days ahead of the broadcast of an ITN Tonight programme on Thursday, to air on 9 February, on the cost of green policies, which has sparked fears among green groups flagship policies will again come under attack.

Keith Allott, head of climate change, WWF-UK, said the news provided further evidence the cost of renewables was becoming an increasingly emotive issue.

"The whole issue of energy bills and renewable energy has been whipped up into a media storm over recent months, with scant regard to the real evidence base," he said. 

"The Daily Mail has run three corrections to lead articles which tried, erroneously, to blame green policies for the increase in consumer bills. KPMG's report led to a Sunday Times article and informed a very skewed BBC documentary on renewables, but now it seems that it may never see the light of day.

"We urgently need to inject some integrity and honesty back into this debate."

 

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